The Daley Note: November 22, 2023
Enbridge (ENB) plans to hold an open season in 4Q23 to expand Gray Oak Pipeline and offer full-path service for crude oil exports through the Enbridge Ingleside Energy Center (EIEC).
ENB announced the open season in its 3Q23 earnings report. If the tariff for the additional capacity is in line with current tariffs from the Permian Basin to Corpus Christi, the Gray Oak expansion will pave the way for additional crude oil exports.
Pipelines from the Permian to Corpus Christi are running at an average utilization rate of 91% in November, according to East Daley Analytics’ Crude Hub Model. Permian-to-Corpus routes are above the 90% cap on committed volumes mandated by the Federal Energy Regulatory Commission (FERC), which trigger unattractive walk-up rates for shippers.
As a result of the higher walk-up rates, we’ve seen additional barrels diverted to the Houston market and to Cushing, even though docks in Corpus Christi still have ample export capacity. In the Crude Hub Model, we project Corpus Christi export terminals to average 52% utilization in November, while ENB’s EIEC terminal sees 53% utilization.
Enbridge previously said that a 200 Mb/d expansion on Gray Oak is possible. East Daley believes the expansion will be completed through drag-reducing agents.
To fill the Gray Oak expansion, EDA forecasts crude oil volumes would primarily shift from Houston as well as displace some barrels flowing to Cushing. Enterprise Products (EPD) recently announced plans to convert the Midland-to-Echo 2 pipeline to NGL service in December 2023, which will take some capacity offline to the Houston refiner and export market.
The additional crude flows Gray Oak would relieve pressure on pipelines transporting to the Houston market. If the Gray Oak project is successful, Permian-to-Houston pipeline utilization would decline from 94% to 90% by December 2024, according to the Crude Hub Model. – Kristine Oleszek Tickers: ENB, EPD.
East Daley, Hart Bring NEW Gas & Midstream Weekly on November 9th
East Daley is teaming up with Hart Energy on the NEW Gas & Midstream Weekly newsletter. This new report combines the strengths of Hart Energy's journalistic reporting and analysis on natural gas, LNG, midstream energy and deal-making with EDA's deep research and intelligence of hydrocarbons, storage and transportation.
Published every Thursday morning, this new powerhouse newsletter is an interactive and enlightening read highlighting breaking news, exclusive interviews, videos, charts, maps and more. The newsletter utilizes East Daley's Energy Data Studio tools for natural gas predictive analytics with Hart Energy's Rextag mapping tools to present a holistic view of pricing triggers, infrastructure growth, pipeline and processing bottlenecks, regulatory and legal hurdles, and the inevitable solutions.
Energy Data Studio
East Daley Analytics has launched Energy Data Studio, a platform for our industry-leading midstream data and commodity production forecasts. All clients have access to the new client portal. If you have not yet logged in, please fill out the form to request a registration email be resent.
Energy Data Studio leverages our G&P data set for insights into midstream assets across every major oil and gas basin in North America. Users can navigate detailed visual dashboards by region, pipeline, or individual asset to understand crude oil, natural gas and NGL supply at the most granular level.
Energy Data Studio is available through data downloads from the visual interface, in Excel files, or as a direct feed delivered into subscribers’ workflow via secure file transfer. To learn more about Energy Data Studio, please contact insight@eastdaley.com.
The Daley Note
Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.
